The Guardian, Wikileaks cables and oil production in Saudi Arabia

The information that has now been leaked about Saudi Arabia’s ability to pump oil is nothing new for me. I have heard it before and Sadad al-Husseini has previously presented this viewpoint publicly several times. What is interesting is that the US ambassador picked up the information in 2007 and sent it to Washington.

At the moment I am working on the chapter in my book “Peeking at Peak Oil” that deals with Saudia Arabia. In it I will be arguing that oil production in Saudi Arabia will be around 7.7 million barrels per day (Mb/d) in 2030 based on extrapolation of the trends we see today. There is a possibility of 10 Mb/d of production but that would require additional measures. In World Energy Outlook 2010 we can read that production was 9.7 Mb/d in 2009 and the IEA expects that it will be 14.6 Mb/d in 2035 which is clearly wishful thinking.

The problem with Saudi Arabia is “recovery factors”. They say that, at the start of production they had over 716 billion barrels (Gb) and that they have a recovery factor of 51%. The global average currently stands at 30% and in future might possibly reach 40%. Saudi Arabia says that they are much better at recovery than others. It is by using the 51% recovery factor that Saudi Arabia estimates their reserves as 260 Gb. But with a recovery factor of 30% their remaining reserves would only be 110 Gb and if it is 40% then the reserves would be 180 Gb. One can interpret the statement by Sadad al-Husseini as meaning that he does not believe in a recovery factor of 51%. Details on this and much more will come later this year when my book is published.

You also have to factor in the fact that Saudi Arabia uses more and more of it’s own oil for domestic/internal consumption.

Their actual, net exports, have peaked in 2005 at slightly above 9 mb/d. It’s around 7.4 now and will fall further in the years to come. Even if they got to, say, 11 mb/d in a few years time the actual net exports that they ship to other countries would not go above the 2005 benchmark.

Saudi Arabia has peaked in the only statistic we care about: their exports to the rest of the world.